The front page of The Wall Street Journal on July 23, 2014, featured five articles: one each about Israel, Obamacare, Russia, cocktail-scented household cleaning supplies, and a certain German bank. “Fed Raps Deutsche Bank for Shoddy Reporting” was the headline in the newspaper’s lower right corner. The Journal had obtained a letter sent to the bank months earlier by Daniel Muccia, a senior vice president at the Federal Reserve in New York, one of the people responsible for regulating Deutsche on a day-to-day basis. In the letter, excerpts of which the Journal posted online, Muccia blasted Deutsche for the problems in its U.S. arm, DBTCA. He accused the bank of producing financial reports that “are of low quality, inaccurate and unreliable. The size and breadth of errors strongly suggest that the firm’s entire U.S. regulatory reporting structure requires wide-ranging remedial action.” Muccia went on to warn that the shortcomings constitute a “systemic breakdown [and] expose the firm to significant operational risk and misstated regulatory reports.”
In the parched lexicon of central bankers and regulators, understatements reign. Muccia’s letter qualified as a fiery condemnation. It gave voice to more than a decade of mounting frustration inside the Fed about Deutsche’s inability or unwillingness to fix its long-standing problems. The letter noted that examiners from the Fed had been complaining about this to Deutsche since 2002, yet the problems hadn’t been addressed. If anything, they seemed to have worsened.
As a DBTCA board member, Broeksmit had witnessed firsthand the Fed’s rising anger. In fact, this very letter had landed in his Yahoo email account about a month before he died. It was not a coincidence that it was now appearing on the cover of The Wall Street Journal.
A few days after his father’s memorial service, Val had come to terms with the fact that his life was a mess. For years, he had been abusing painkillers, part of an unsuccessful strategy to suppress his inner misery. Getting opioids in America without a prescription was proving to be much harder than it had been in England. After Beth returned to London, Val sat down with his family to discuss his rehab options. Alla didn’t exactly leap at the opportunity to foot the bill for a resort-quality withdrawal and recovery experience. She urged Val to hunker down for a few days at the cushy University Club, where he’d been staying on her dime, and try to snap his addictions. Val knew that such an unsupervised approach wouldn’t work, and he eventually persuaded his mother to send him to rehab.
He started out in a facility in Palm Beach, Florida, but after a couple of weeks he got kicked out because he was unleashing his anger on patients and staff. Val by now had concluded that maybe rehab wasn’t such a good idea after all, but his family arranged for him to be transferred to another outfit, Alta Mira, in the Sausalito foothills outside San Francisco. For $50,000 a month, residents lounged on the back patio, enjoying the soft Pacific breeze and a view of the Golden Gate Bridge, and dined on food prepared by gourmet chefs. Val felt like a prisoner.
That spring, Alla and Beth flew to San Francisco to participate in “family week” at Alta Mira. On walks with Beth around Sausalito, Val seethed with anger—especially toward his mother, who he felt had used her husband’s death as an excuse to abandon her son once and for all, albeit in a luxe rehab joint. “When Dad died, your worst fears and most secret dreams came true at once,” Val spat at Alla in a family therapy session. The words shredded some of the remaining threads tethering him to his family. Beth, too, said goodbye to Val and flew back to London, their relationship essentially over.
In the privacy of her Greenwich Village studio, Alla would shut her eyes and let her mind drift back to her days in Vienna, with the young Val in tow. She remembered the simple, pure feelings of loneliness, of fear, of being a refugee. They inspired her to paint, and she started attending art classes in New York City, showing up in dark sunglasses and with Daisy tucked under her arm. Classmates could tell something was haunting her, but when they asked what was wrong, she politely rebuffed them. Alla had come to blame Deutsche for pushing Bill over the edge or, at the very least, of not doing enough to cushion his fall. She knew her husband had been tangled up in some serious business—why else, she speculated, had he told her he’d been talking to the feds?—and she was reminded of this every time a new government investigation into Deutsche came to public light. “My poor brilliant Bill,” she lamented to an acquaintance. “What did they make him do?”
Worried about money, Alla considered trying to wring some out of Deutsche, which she believed owed her for Bill’s years of work. She toyed with the idea of a wrongful-death lawsuit, and her lawyers began researching the recent history of violence in the finance industry. There were plenty of examples. In April 2014, for example, a former senior executive at a big Dutch bank had murdered his wife and daughter before killing himself. The prior year had brought Pierre Wauthier’s suicide in Switzerland, as well as David Rossi’s fall out of his Monte dei Paschi window. In the end, no lawsuit would be filed. Deutsche agreed to make periodic payments to Alla that represented the value of bank shares that Bill had been awarded but that he hadn’t been eligible to cash in at the time of his death.
Early in the summer of 2014, Alla and her daughters traveled to Maine to scatter Bill’s ashes. The tiny town of Brooklin—on the family plot with the tennis court and pond—was where he had been happiest, dating back to his days with Edson. His family figured that the always practical Broeksmit would have wanted his remains to help enrich his beloved land. Val was devastated not to be invited. He wondered if his mother was icing him out because she was trying to hide something.
Val slowly burned off some of his anger and began opening up in group therapy sessions. He made friends with people who saw a sensitive, tortured soul. “He was a wounded little boy,” says Sidney Davis. “He wanted to be loved by his mother.” One day a new guest arrived: a middle-aged woman with blond hair, a guitar, and a dog. Val spotted her, alone and crying, on a concrete staircase that led up a hillside, and he sat down next to her. They spent two hours chain-smoking and talking. Her name was Margaret, and her marriage had just imploded. She was considering suicide. Val told her how his father had recently killed himself, and they grieved together about each other’s misfortunes. She later told Val her real name: Pegi Young. She was an accomplished musician and the founder of the famed Bridge School in California, but she was best known as the soon-to-be-ex-wife of the rock star Neil Young. “Are you fucking kidding me?” Val asked. Listening to Pegi’s description of her broken marriage, he knew he could never enjoy Neil Young’s music again.
Pegi eventually left Alta Mira, and Val followed in July 2014. Warming to the role of surrogate mother, she helped him relocate to a “sober living” house in Strawberry Manor, a waterfront enclave north of San Francisco. Val spent his time stewing—about Beth, Bill, and Jonathan Avila, whose method of suicide was now linked in Val’s mind with his father.
Val’s roommate at the Strawberry Manor house was a twenty-two-year-old named Spencer. One afternoon he, Val, and another resident were sitting around chatting. Spencer excused himself and went to the bathroom. When he didn’t return after a while, Val and his housemate went looking for him. They knocked on the bathroom door. Spencer didn’t answer. They tried to open the door, but something had wedged it shut. Val kicked it in. Spencer was passed out on the floor, his face blue, overdosing. Someone called 911. Waiting for the paramedics to arrive, Val cradled Spencer’s unconscious head, trying to keep him from choking on his vomit and wondering if this was going to be the second time this year he’d been in a room with a dead man. Fortunately, the paramedics managed to resuscitate him.
A drug overdose was simple. Val knew firsthand how easy it was to push things too far. What he couldn’t understand—what continued to drive him crazy—is what had led his father to die. Despite the coldness Bill had acknowledged in his farewell note to Val, he had defended his son when Alla seemed ready to give up. His suicide had destabilized the family in a way that left Val, already the black sheep, on the road to being erased. He needed to know why.
Before leaving London, Val had written down all of his father’s computer passwords. Now he signed into his dad’s Yahoo and Gmail accounts, wandering, more or less aimlessly, through thousands of messages. He hadn’t given up hope that he would encounter evidence of a secret lover or crushing debts or some other awful secret that, while painful to confront, would reveal why his father felt he had no choice but to die. After a couple of days, though, Val concluded that even if such a clean explanation existed—and he was beginning to doubt it—it wouldn’t be easy to find.
There were three main types of messages in Bill’s email accounts. The first was personal stuff: years of detailed records of Bill’s arranging dinners or vacations or trips to the Russian and Turkish Baths, bantering about finance or politics with friends and colleagues, and dealing with an enormous volume of logistics and financial management for his wife, children, and extended family. These were interesting to Val in a voyeuristic way, but they weren’t enlightening.
The second category of emails was spam. Bill had been constantly bombarded with the usual offers of porn, magical weight-loss pills, surgical enlargements, and Republican National Committee fundraisers.
The final variety was stuff related to Deutsche, and this was the area to which Val started to devote most of his waking hours. Through process of elimination, he had begun to suspect that whatever had led his father to kill himself might have had something to do with his job. There must be something in those emails, Val figured; why else would Deutsche officials have poked around in Bill’s computer right after his death? And the fact that one of his farewell notes was to Anshu, one of the world’s most powerful bankers, added to Val’s conviction that Deutsche had been on his mind when he decided to die. Val had glanced at Jain’s letter when the police forced him to identify his father’s handwriting, but he hadn’t read the words.
Some of the Deutsche emails made sense to Val. It quickly became clear, for example, that Anshu had turned to Bill again and again to extinguish problems that were burning the bank. It was also obvious that Bill at times felt overwhelmed, concluding that banks of Deutsche’s size were simply too big to manage. (“Hard to know how banks keep track of the hundreds of billions flowing through their pipes every day,” Broeksmit wrote in one email to a friend.) And Val knew his father well enough to detect when he was angry, as he clearly was when he was scolding his DBTCA colleagues for their lackadaisical approach to the Fed’s stress tests. But the overwhelming majority of the messages were incomprehensible, jammed with jargon, acronyms, and big numbers. Val needed guidance about what to search for and someone to translate what he found.
Five months earlier, I had contacted Val. I was part of a group in The Wall Street Journal’s London bureau that had set out to learn everything we could about the circumstances of Broeksmit’s suicide. Gossip about his having been involved in government investigations and angry at Jain was making the rounds in the city’s banking circles. (Further piquing our curiosity was the grisly recent pattern of bankers killing themselves. Two days after Bill’s death, a JPMorgan worker in London jumped from the top of the bank’s Canary Wharf skyscraper.) Val maintained an active social media presence, and I quickly found his email address. In early February, nine days after Bill’s death, I sent him a note asking to speak with him for a potential story about his father. He responded the next day: “What is it you want to know?” I told him that we had heard that Broeksmit had expressed regrets about his time at Deutsche and that I’d be happy to go into more detail over the phone. Val asked me to leave his mother and sisters alone, and perhaps he would speak to me when things settled down. “Everyone is very sad and grieving right now,” he wrote.
After a couple of weeks of my pestering, Val grudgingly got on the phone. It was the middle of the night in London and evening in Florida, where Val had recently arrived to enroll in rehab. I paced in my darkened apartment, my wife and infant son sleeping, as Val berated me for digging into his father’s life. He was rambling, and his speech was slurred; he didn’t sound sober. He insisted, falsely, that his family already knew the true reasons Bill had killed himself and assured me that those reasons had nothing to do with Deutsche. His message was that there was no story here. The conversation ended with Val’s agreeing to remain available to answer questions and my promising to keep him apprised about what we planned to write.
We kept in sporadic touch. He seemed to enjoy teasing me with provocative messages, only to disappear without explaining what he meant. “I think I know what happened,” he emailed me in March 2014, saying he would call me as soon as he could. He didn’t call, but a few days later, apropos of nothing, he emailed me a low-resolution iPhone photo of a building on fire in downtown San Francisco, black smoke billowing across the cloudless dusk sky. “Thought you reporters needed a pic,” he wrote cryptically. (The photo, we figured out from data embedded in the file, was taken on Alta Mira’s back patio.) Over the next four months, I periodically emailed and texted him, asking if he was ready to talk. He rarely replied.
And then, on a Tuesday evening in mid-July, about two weeks after Pegi Young had deposited him at the Strawberry Manor house, Val sent me an email: “Are you still looking into deutsche?” He explained that he had gained access to his father’s work emails. He said it looked like there was some interesting stuff, but he didn’t know what he was doing and there were thousands of messages to sift through. Could I provide some keywords and names to narrow his search?
My colleague Jenny Strasburg and I drew up a list of words, phrases, and acronyms like “subpoena” and “DOJ” (Department of Justice). Within a couple of hours, Val started sending me items that his searches had turned up. There were exchanges between Bill and Anshu, memos about upcoming board meetings, and emails with befuddling snippets like “persistent non-arbitrageable price differential with a long-term drift with mean zero.” Some of this was interesting—journalists rarely get unvarnished peeks at the private communications of top corporate executives—but nothing jumped out as newsworthy.
That changed at 1:33 in the morning of July 18. Val sent me an item that he said included at least three of our search terms: “BaFin,” “subpoena,” and “FRBNY.” “Don’t know what it means,” Val cautioned. I started skimming and realized it was the very unhappy letter to Deutsche from the Fed’s Daniel Muccia. Given Deutsche’s vast size, the Fed’s discomfort had big implications for investors, fellow banks, and just about anyone who had a stake in the global financial system. Trying not to show my excitement, I asked Val if he would be okay with my writing a story about this document. I braced for a protracted negotiating session, but Val surprised me. “If you’d [like] to write a story and leave my dad out of it, that’s cool,” he answered. “Please don’t tell anyone where you’re getting this info.”
Four days later, we published the story. “An examination by the Federal Reserve Bank of New York found that Deutsche Bank AG’s giant U.S. operations suffer from a litany of serious problems, including shoddy financial reporting, inadequate auditing and oversight, and weak technology systems, according to documents reviewed by The Wall Street Journal,” the first sentence read. Deutsche’s already beaten-down stock tumbled 3 percent. Val read the article and contemplated the effect of his actions. He liked the feeling of having knocked more than $1 billion off Deutsche’s market value—of having made a difference.